Last close As at 05/08/2026
GBP190.10
▲ −20.00 (−0.11%)
Market capitalisation
GBP6,282m
Research: Consumer
Games Workshop Group’s FY24 trading update provided a nice surprise on the revenue side, broadly equally split between core and licensing, and an even nicer surprise for PBT, suggesting an improvement in gross margin. We have upgraded our FY24 estimates to be consistent with the indicated figures and marginally increase our estimates for FY25, which reverts to a 52-week period accounting period.
Games Workshop Group |
FY24 profit estimates beaten |
FY24 trading update |
Consumer goods |
21 June 2024 |
Share price performance
Business description
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Analysts
Games Workshop Group is a research client of Edison Investment Research Limited. Opinions and forecasts represent the Edison Research department’s view. |
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Games Workshop Group’s FY24 trading update provided a nice surprise on the revenue side, broadly equally split between core and licensing, and an even nicer surprise for PBT, suggesting an improvement in gross margin. We have upgraded our FY24 estimates to be consistent with the indicated figures and marginally increase our estimates for FY25, which reverts to a 52-week period accounting period.
Year end |
Revenue (£m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
05/22 |
414.8 |
158.1 |
394.6 |
235.0 |
27.1 |
2.2 |
05/23 |
470.8 |
171.6 |
411.8 |
415.0 |
26.0 |
3.9 |
05/24e |
520.0 |
201.9 |
459.5 |
420.0 |
23.3 |
3.9 |
05/25e |
534.5 |
198.4 |
451.1 |
420.0 |
23.7 |
3.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
FY24 ahead of expectations
The company has indicated that FY24’s (53-week) core revenue will be not less than £490m and licensing income will be £30m, which we believe is an all-time high, giving year-on-year growth rates of 10% and 18% respectively. Total group revenue of £520m was c £9m ahead of our prior estimate, roughly equally split between core and licensing. The surprise came at the profit level, with an indicated PBT not less than £200m. The indicated profit is almost c £14m ahead of our prior estimate of £186.2m using the company’s definition of PBT, despite £7m of incremental group profit share expenses. This implies a core operating margin c 3pp above our prior estimate of c 33%, and therefore a better gross margin than we had forecast.
Upgrades for FY24 and FY25
Ahead of publication of the full financial statement on 30 July, we have increased our FY24 estimates to be consistent with the indicated figures and increased our FY25 PBT estimate by 2% to c £197m, using the company’s definition. The year-on-year decline in PBT reflects: 1) a lower core gross margin due to product phasing; and 2) lower licensing income following a very good FY24, albeit we note there is limited visibility on this source of revenue and Games Workshop Group’s high operating margin of over 90% can swing profit estimates disproportionately. We have trimmed our FY25 dividend estimate so that it is stable versus FY24.
Valuation: Within historical range
The share price rightfully responded well to the positive trading update, having traded within a relatively narrow range since the start of CY24. On our new estimates, the prospective P/E multiple of 23.7x in FY25e remains above the average multiple of 18.9x since FY17, but lower than more recent peak multiples in the mid-20s. The company’s distribution policy also provides an attractive dividend yield of 3.9% in FY25e.
Exhibit 1: Financial summary
Year-end 31 May |
£m |
2022 |
2023 |
2024e |
2025e |
|
|
|
|
IFRS |
IFRS |
IFRS |
IFRS |
INCOME STATEMENT |
|
|
|
|
|
|
Revenue |
|
|
414.8 |
470.8 |
520.0 |
534.5 |
- Core revenue |
|
|
386.8 |
445.4 |
490.0 |
509.3 |
- Licensing revenue |
|
|
28.0 |
25.4 |
30.0 |
25.2 |
Cost of sales |
|
|
(127.4) |
(149.2) |
(149.5) |
(163.0) |
Gross profit |
|
|
287.4 |
321.6 |
370.6 |
371.5 |
Operating expenses |
|
|
(94.2) |
(108.3) |
(132.6) |
(134.0) |
EBITDA |
|
|
193.2 |
213.3 |
238.0 |
237.5 |
Depreciation and amortisation |
|
|
(36.1) |
(43.1) |
(38.6) |
(41.0) |
Reported operating profit |
|
|
157.1 |
170.2 |
199.3 |
196.6 |
- Core operating profit |
|
|
131.7 |
148.2 |
171.8 |
173.4 |
- Licensing operating profit |
|
|
25.4 |
22.0 |
27.5 |
23.2 |
Finance income/(expense) |
|
|
(0.6) |
0.4 |
1.4 |
0.6 |
Reported PBT |
|
|
156.5 |
170.6 |
200.8 |
197.2 |
Profit Before Tax (norm) |
|
|
158.1 |
171.6 |
201.9 |
198.4 |
Income tax expense (includes exceptionals) |
|
|
(28.1) |
(35.9) |
(50.2) |
(49.3) |
Reported net income |
|
|
128.4 |
134.7 |
150.6 |
147.9 |
Adjusted net income (before share-based payments) |
|
|
129.7 |
135.5 |
151.4 |
148.8 |
WASC (m) |
|
|
32.813 |
32.881 |
32.933 |
32.964 |
Average Number of Shares Outstanding (m) |
|
|
32.873 |
32.898 |
32.950 |
32.981 |
Reported EPS (p) |
|
|
391.3 |
409.7 |
457.2 |
448.6 |
Reported diluted EPS (p) |
|
|
390.6 |
409.4 |
457.0 |
448.4 |
EPS - normalised fully diluted (p) |
|
|
394.6 |
411.8 |
459.5 |
451.1 |
DPS (p) |
|
|
235.0 |
415.0 |
420.0 |
420.0 |
|
|
|
|
|
|
|
Gross margin |
|
|
69.3% |
68.3% |
71.3% |
69.5% |
EBITDA margin (including licensing income) |
|
|
46.6% |
45.3% |
45.8% |
44.4% |
Operating margin |
|
|
37.9% |
36.2% |
38.3% |
36.8% |
|
|
|
|
|
|
|
BALANCE SHEET |
|
|
|
|
|
|
Property, plant and equipment |
|
|
55.0 |
55.7 |
57.7 |
59.4 |
Right-of-use assets |
|
|
48.1 |
48.9 |
47.0 |
45.1 |
Goodwill |
|
|
1.4 |
1.4 |
1.4 |
1.4 |
Intangible assets |
|
|
25.6 |
21.2 |
24.7 |
28.1 |
Other non-current assets |
|
|
37.2 |
25.6 |
25.6 |
25.6 |
Total non-current assets |
|
|
167.3 |
152.8 |
156.4 |
159.6 |
Cash and equivalents |
|
|
71.4 |
90.2 |
101.2 |
107.0 |
Inventories |
|
|
38.4 |
33.0 |
33.9 |
35.6 |
Trade and other receivables |
|
|
39.6 |
36.3 |
42.4 |
43.6 |
Other current assets |
|
|
4.4 |
14.5 |
14.5 |
14.5 |
Total current assets |
|
|
153.8 |
174.0 |
192.0 |
200.6 |
Trade and other payables |
|
|
(33.5) |
(37.0) |
(45.1) |
(46.6) |
Borrowings |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Leases |
|
|
(9.2) |
(9.9) |
(9.9) |
(9.9) |
Other current liabilities |
|
|
(1.9) |
(1.3) |
(1.3) |
(1.3) |
Total current liabilities |
|
|
(44.6) |
(48.2) |
(56.3) |
(57.8) |
Borrowings |
|
|
0.0 |
0.0 |
0.0 |
0.0 |
Leases |
|
|
(39.7) |
(40.0) |
(37.6) |
(34.6) |
Other non-current liabilities |
|
|
(2.1) |
(3.0) |
(3.0) |
(3.0) |
Total non-current liabilities |
|
|
(41.8) |
(43.0) |
(40.6) |
(37.6) |
Net assets |
|
|
234.7 |
235.6 |
251.6 |
264.8 |
|
|
|
|
|
|
|
CASH FLOW STATEMENT |
|
|
|
|
|
|
Operating Cash Flow |
|
|
157.1 |
170.2 |
199.3 |
196.6 |
Depreciation and amortisation |
|
|
34.8 |
39.5 |
38.6 |
41.0 |
Impairments |
|
|
1.3 |
3.6 |
0.0 |
0.0 |
Share-based payments |
|
|
1.6 |
1.0 |
1.1 |
1.2 |
Other adjustments |
|
|
0.3 |
(1.2) |
0.0 |
0.0 |
Movements in working capital |
|
|
(35.9) |
18.6 |
1.1 |
(1.3) |
Income taxes paid |
|
|
(37.7) |
(39.0) |
(50.2) |
(49.3) |
Operating cash flow 2 |
|
|
121.5 |
192.7 |
189.9 |
188.2 |
Net capex and intangibles |
|
|
(32.3) |
(28.3) |
(32.2) |
(34.1) |
Net interest |
|
|
0.2 |
0.3 |
1.4 |
0.6 |
Net proceeds from issue of shares |
|
|
1.8 |
2.6 |
2.6 |
2.6 |
Dividends paid |
|
|
(93.5) |
(136.5) |
(138.3) |
(138.4) |
Other financing activities |
|
|
(11.9) |
(11.8) |
(12.4) |
(13.0) |
Net cash flow |
|
|
(14.2) |
19.0 |
11.0 |
5.8 |
Opening cash and cash equivalents |
|
|
85.2 |
71.4 |
90.2 |
101.2 |
Currency translation differences and other |
|
|
0.4 |
(0.2) |
0.0 |
0.0 |
Closing net (debt)/cash |
|
|
71.4 |
90.2 |
101.2 |
107.0 |
Closing net cash including leases |
|
|
22.5 |
40.3 |
53.7 |
62.5 |
Source: Games Workshop Group accounts, Edison Investment Research
|
|
Research: Consumer
Intralot reported good underlying revenue growth in Q124, offset by broad-based unfavourable foreign exchange translation effects and some phasing. Our estimates are unchanged following the results. The company also announced the appointment of Nikolaos Nikolakopoulos as CEO. Mr Nikolakopoulos, who remains as CEO of the US subsidiary, Intralot Inc, takes the role from the incumbent chairman, Sokratis Kokkalis. The US is a key market for the company’s future growth aspirations, with plenty of opportunities to gain share in the next few years.